By MARK GRANT
For Rantoul Press
The big push early in the 101st General Assembly is to nearly double Illinois’ minimum wage from $8.25 to $15 per hour by 2025. Raising it 80 percent over six years will have serious negative consequences for small businesses and their workers.
Supporters of the hike say we need to raise the minimum wage because you can’t raise a family on $8.25 per hour, but we think that premise is a red herring. The minimum wage is actually a starting wage. It is not and never was meant for experienced hourly workers. It’s what an employer pays new inexperienced workers who are learning job skills.
When the Illinois Legislature took up a similar bill in 2017, the NFIB Research Center crunched the numbers and concluded that raising the state minimum wage to $15 per hour would result in the loss of more than 93,000 jobs over the first 10 years it goes into effect. Here are some reasons why:
One, obviously, is the impact of the government dictating that employers give workers who currently earn the state minimum wage an 80 percent pay raise. According to the latest figures from the U.S. Bureau of Labor Statistics, about 18,000 people earn the state minimum wage.
Secondly, and this is very significant, employers would have little choice but to give a raise to hourly workers who earn a more than minimum wage. Starting pay here is $8.25 an hour. Suppose you have an employee who’s been on the job a few months and does a great job. Their hourly wage is, say, $12 an hour. If the state tells you that someone with no experience must start at $15 per hour, you’ll need to pay the experienced employees a few dollars on top of that. It’s government-mandated inflation.
Think about the thousands of Illinois small businesses along the borders of our neighboring states that have lower minimum wages. These businesses will be forced to raise prices and/or reduce employee hours. They will eventually lose business to their competitors just across state lines. Price is king for consumers, they’ll shop next door.
Supporters also want the $15 minimum wage to apply statewide. They are ignoring the cost of living difference between Chicago and the rest of Illinois. Our small businesses across our state, in our communities who are our neighbors, will get hit the hardest.
What’s especially frustrating about all this is that economists say raising the minimum wage would have a negligible impact on working families. Supporters also claim it will help the working poor. Again, University of Washington researchers who have studied the effects of the $15 minimum wage in Seattle found that while low-wage workers got raises, they lost hours. The study said for an average low-wage workers in Seattle, that would translate into a loss of about $125 per month.
Illinois has seen a steady stream of taxpayers and businesses leaving over the last several years. This will undoubtedly worsen the trend. Can we afford this?
Small businesses say absolutely not. If the General Assembly is serious about helping working families, it will focus less on forcing wage hikes and more on solving
Illinois’ debt and pension crises and creating an environment where small businesses can grow and create good paying jobs.
Mark Grant is the National Federation of Independent Business state director for Illinois. He lives in Springfield.